Video 14:13
Australia not in an economic crisis

Andrew Neil, the publisher of The Spectator discusses his impressions of the Australian government as well as the Scottish referendum on independence from Great Britain.

Transcript

TONY JONES, PRESENTER: Treasurer Joe Hockey earlier tonight was being hosted by and getting a grilling from Britain's Andrew Neil, publisher of The Spectator magazine, former editor of Rupert Murdoch's Sunday Times. Andrew Neil also hosts several BBC programs, was a founder of Britain's Sky News and has written best-selling books on politics and the media and he joins us now in the studio.

Thanks for being here.

ANDREW NEIL, PUBLISHER, THE SPECTATOR: It's a pleasure to be here.

TONY JONES: What does the Abbott Government look like to British Conservatives?

ANDREW NEIL: It looks like 2010 when the British Conservatives got elected as part of a coalition government. Talking the talk, as they did in opposition, about cuts, but finding it tougher to walk the walk when you're actually in power. The British Government has found it that way and I suspect after my interview tonight with Mr Hockey that the current government in Australia's going to find it tough too.

TONY JONES: Well, yes, it'd be great to get to interview him, as you did, of course. Now one message you ...

ANDREW NEIL: (Laughs) I'll put a word in for you - if you put a word in for George Osborne for me in Britain.

TONY JONES: I'm sure we can agree to do both of those things. One message you drummed home to Joe Hockey in that interview was, "You don't know how lucky you are," more or less, that the Australian Government is in a remarkably good economic position by comparison to other countries in the G20. Do you think he's actually making out the economy to be worse than it is?

ANDREW NEIL: Well he has inherited a mismatch between spending and tax revenue. Under the last Labor government here, spending was twice as fast as tax revenues. Some of that was to get out of the recession, but it's kind of baked into future projections. So I understand the requirement to do something about that, but I can't think of a Finance minister in the Western world that wouldn't give their left arm to be in the position of the Australian Government. I mean, national debt of 23 per cent. You want to know how much it is in Italy? 132 per cent of GDP. Greece: 170 per cent. Even the United Kingdom: 80 per cent; using other criteria, as much as 100 per cent. A deficit of three per cent every year. Now these are figures you may want to deal with, but you're not dealing with a crisis compared to the situation in Europe or even the United States.

TONY JONES: Is there, politically, as you perceive it, a reason to create an atmosphere of crisis when you're going to bring down a tough government and rein in pensions and possibly aged care and put payments - extra payments on people's going to the doctor and so on?

ANDREW NEIL: You've got to do things that are unpopular, so therefore you want to give the impression that there is no alternative. In the famous words of the famous Mrs Thatcher, TINA: There Is No Alternative. But I get the sense also that they know if they don't do things, it could deteriorate. That the - rather by international standards, the rather strong fiscal position that Australia finds itself in, if there isn't some kind of remedial action, as the IMF has said in its recent report on this country, then things could get a lot worse. All I'm saying is that if you want to deal with fiscal problems in the 21st Century, the position Australia is currently in is not a bad place to start.

TONY JONES: Let's look at a couple of Tony Abbott's other policies. I'm interested to get your perspective and if you can sort of do it this way, to tell what British Conservatives might be thinking about it. For example, his emblematic policy of turning back the boats, asylum seeker vessels back to Indonesia to stop the flow of asylum seekers to Australia, setting up offshore detention centres - in fact the previous government did that, but they weren't mimicking the policy of the previous Howard Government. How is that looked on in Great Britain: with envy or with horror?

ANDREW NEIL: Well, I think that the Conservatives look on it with a certain envy because in the end you're in control of your own borders. The Conservatives don't like the idea that there's freedom and movement of labour and people from the rest of the European Union into the United Kingdom. Of course it's a two-way street. We can go and live wherever you want in the European Union. They have no way of getting rid of that. It's written in to the Treaty of Rome going back to 1957. But immigration's a huge issue in Britain. It's a huge issue across Europe. And it is so, one, because there's been a lot of it. Net increasing immigration in Britain: over 2.5 million in the past 12 years. That's quite lot of people. A lot per capita. But also because the European economies have been stagnant. And if you look at unemployment rates, I mean, they are eye-watering. The average unemployment in Spain: 20 per cent. 60 per cent if you're young. Same in Greece. Average unemployment in France: 12 per cent. 25 per cent if you're young. 30 to 40 per cent if you're young and Algerian. So it's only - the thing that slightly surprises me is that although you see the rise of what you might call the hard right across the Continent, when you look at the social conditions in Europe, it could actually be taken as a rather surprise that they're not doing even better.

TONY JONES: The other talismanic Abbott policy that he came to government with was to scrap the carbon tax, to end the Emissions Trading Scheme and to bring in a Direct Action policy funded directly with a cap from the budget. But Britain's David Cameron is still part of the European emissions trading scheme. He was a passionate advocate for action on climate change and that seems to be changing.

ANDREW NEIL: Well he did come to power promising to be the greenest government ever, but power has a strange way of changing your mind. And the consensus that Britain had at the end of last decade over green issues, which include Labour, the Liberal Democrats and the Conservatives - Mr Cameron's favourite - famous trip to go and hug a husky in the Arctic. He's now used the phrase, if I may simply quote him off the record, "It's time to cut the green crap." And the Government now, the Conservative side of it, is nowhere near as green as it was.

TONY JONES: But they'll still stay with the emissions trading scheme?

ANDREW NEIL: That's not so important for them. The European emissions trading scheme hasn't worked. What they did do was introduce a carbon floor price that all businesses would have to pay. In the last budget the Chancellor of the Exchequer, the Treasury Minister decided it was time to freeze it and not increase it for the foreseeable future.

TONY JONES: Now, just going back to Joe Hockey, that speech, the age of entitlements is over, was actually made in London a couple of years ago. His main target ...

ANDREW NEIL: 2012.

TONY JONES: Indeed. His main target was European countries and their profligate spending on welfare etc., etc. He's bringing the idea back to Australia though. Among other things, he's talking about cutting entitlements, but he's leaving a lot of middle class welfare in place. Do you think that smacks of hypocrisy?

ANDREW NEIL: Well, I think it smacks of politics, because the people who really vote in any country are middle class and they're old. And even the British Government, which has gone out of its way to try and find ways to cut, has left pensions untouched. Even free BBC licences for the over 75s are untouched. Even if you are a multimillionaire, you get a winter fuel allowance if you're over 65. And that is because old people tend to vote, young people don't, the middle class tend to vote, a lot of poorer people tend not to. And sometimes the Realpolitik of politics overtakes even the public spending cutting instincts of a Conservative.

TONY JONES: Well, except in this case, Joe Hockey's talking possibly about changing access to the aged pension, setting a means test on it, all sorts of things.

ANDREW NEIL: Indeed, I know he's been talking about that and you'll know much more than I do about these things, but I think as I said, talking the talk and walking the walk are often two very different things.

TONY JONES: So we'll wait and see what happens in the Budget, as he kept saying to you in fact during the interview this evening.

ANDREW NEIL: I'm afraid so.

TONY JONES: Let's move to your own patch, Scotland in fact, and of course at the end of this year there's a absolutely critical referendum as to whether Scotland should become independent of Britain. Now, I've heard you say that Rupert Murdoch is now so thoroughly estranged from the British establishment that he might in fact take revenge on it by backing the referendum with his media assets in Scotland. Are you serious about that?

ANDREW NEIL: I am serious about it. I'm not saying it will happen, but I'm saying it's a possibility and it's certainly in his mind. He regarded the whole row over phone hacking, something which in the end forced him to close down the News of the World, his biggest-selling tabloid and his first love and the first paper that he acquired in the United Kingdom. He regarded all that as largely hypocritical and simply the revenge of the British establishment that had always hated him. And he's - he now talks - you see, he tweets all the time about toffs and posh David Cameron and all the rest of it, forgetting of course, as I think you will know, that he went to the most exclusive school in Australia, his mother once told me he had over 20 servants when he was a kid and then on to Oxford. But this is the new narrative. And it's simply going through his mind that the biggest revenge he could have on the British establishment would be to break the country up.

TONY JONES: Well, I mean, there's no doubt about that because the consequences of Scotland breaking away are scarcely imaginable. I mean, it would mean a huge reduction in British armed forces, for example.

ANDREW NEIL: They haven't been imagined by the British.

TONY JONES: No, well that's right. So tell us what would they be?

ANDREW NEIL: The debate so far has entirely been on: would independence be good or bad for Scotland? And that's understandable; it's only the Scots that have the votes, those who live there. Scots like me who live in London, we don't have the vote. The English have barely woken up to what the consequences would be, but it stands to reason that you cannot lose a third of your land mass or five million of your people without being seriously diminished in international status. And it would put at risk Britain's nuclear deterrent because there is nowhere in England to put it. It would mean at a time when military spending has already been cut, you'd lose another 10 per cent of it. The British seat in the UN Security Council, one of the great status symbols for Britain in the modern world, would come under great threat. Power in NATO and the European Union would come under threat too. These are not consideration for the Scottish nationalists. That's not their issue. They want an independent Scotland. They're entirely entitled to argue for that. But what would be left of Britain would mean that the Americans, for example, would be likely to fly to Paris, the only nuclear power that will be left in Europe, and to Berlin, the most important economy, and pass London by. There is a danger for the English that they would end up Spain without the sunshine.

TONY JONES: Well that would be revenge for Rupert Murdoch indeed.

ANDREW NEIL: If he went that way.

TONY JONES: If he went that way. Now, the last British prime minister that Rupert Murdoch really courted and supported was Tony Blair. Now he's now - Blair is now caught up in a scandal over revelations about a relationship between him and Wendi Deng.

ANDREW NEIL: Alleged. (Laughs)

TONY JONES: Allegedly. They met ...

ANDREW NEIL: I'm just covering your lawyers.

TONY JONES: Allegedly they met in a ranch in California, etc., etc. What do you make of that scandal, first of all? I mean, do you think there's something there beneath the surface because you've got denials, as we must say, from both sides?

ANDREW NEIL: Of course. Mr Blair in particular has denied it. But more important than his denial is the fact that whether it's true or not, Mr Murdoch believes it. Indeed it was the discovery that he believed that something was going on, his people were telling him something was going on. He believed it really brought the divorce around. Things had not been going well in the marriage, but that was the catalyst that brought the divorce around. It was when he visited his ranch in California and the people who work for him there said that Mr Blair had been there when he hadn't. He got back on the plane, called his lawyers and the divorce proceedings then began. And ever since, he's basically been on a mission of revenge against Tony Blair, who let us not forget is godfather to one of his children.

TONY JONES: Yeah, it's an extraordinary story. It's almost Shakespearean in some respects or, if you like, more like the TV series Dallas.

ANDREW NEIL: (Laughs)

TONY JONES: But it is a strange one, isn't it? How did these supposed diary entries from Wendi Deng referring to "pining for Tony" and the shapeliness of his legs etc. - and I think his butt - how did they get involved - are they genuine? Is that something real?

ANDREW NEIL: Well the billet-doux, as you may call it, Wendi Deng, which she never sent to Tony Blair, but which she wrote. I don't think there's any doubt that it's genuine. My own belief is that Vanity Fair got that from Mr Murdoch's people. Not from Mr Murdoch himself necessarily, but certainly got it from his people, otherwise how could they have got it? And I think it's part of this desire of Mr Murdoch to wreak revenge on the former British Prime Minister. I would just add, though, that I think that's now come to an end. I think he thinks he's done enough and that there's no point in pursuing this because of course two of his own children are involved in this, so why make it any worse?

TONY JONES: Yeah. I mean, do you get the impression that this scandal actually cast Murdoch in a slightly more sympathetic light. After all, he's just a human, sort of frail, old man coming to terms with his own foolishness, perhaps?

ANDREW NEIL: Ah, I think for those that Mr Murdoch's tabloids have treated in the way that Mr Murdoch and Mr Blair and Ms Deng have been treated, I think you may find sympathy is in short supply.

TONY JONES: Just one final question. Apart from the salacious aspect of that whole story, there is a sense in which it's actually recast the Murdoch empire, his sons, particularly Lachlan Murdoch, the Australian-based Lachlan Murdoch, coming back into the fold. How significant is that?

ANDREW NEIL: I think it's significant in that it's the reignition of Mr Murdoch's desire to create a dynasty, or maybe you do the American pronunciation of a dynasty. I remember way back in the early '90s he talked about doing this and I remember saying to him, "You don't like the Royal Family because it's hereditary. Why should a public company be hereditary? It's a public company." But it's something he's been obsessed with for over 25 years and he wants to place his children in positions of power. My own view is that we're talking about a public company and when Mr Murdoch goes to the great newsroom in the sky, the institutions that own this company will take over and whether your name is Murdoch or not will not be a determining factor.

TONY JONES: Andrew Neil, we're out of time. It's been a pleasure talking to you. Thank you very much.